Telehealth on the rise

Telehealth, a case of technology meeting healthcare, has become trendy in recent years.

In Hong Kong, hospitals, clinics and telecommunications companies have been increasingly shifting medical services to patients’ homes². Since the start of the global public health crisis, 95% of physicians have increased their use of virtual technology in their interactions with patients³, reducing patients’ and clinicians’ risk of exposure and infection.

Remote patient monitoring and self-diagnostics, and trials of hybrid online-and-offline models are bringing new care models for patients amid accelerating investments in digital health, according to a McKinsey & Co. report⁴. The total venture capital investment into the digital health space stood at US$14.7 billion in 1H 2021, compared with investment of US$14.6 billion for the whole of 2020, and nearly twice the investment of US$7.7 billion in 2019⁴.

Additionally, structural trends of an ageing population, exponential increase in expenditure and the need for better efficiencies in the healthcare system are presenting long-term investment growth opportunities for the medtech industry¹.

Adding a robotics touch

Medical organisations are increasingly harnessing smart technologies to accelerate efficiencies, reduce unnecessary treatments and improve preventive care.

For example, there is an emerging trend where some medtech companies have started to apply machine learning and artificial intelligence (AI) technologies when designing and upgrading surgical robots, allowing for greater precision during surgical operations. In some instances, this is resulting in shorter patient recovery time. In addition to AI innovation in diagnostics and surgery, advanced technologies in healthcare also provide investment exposure to medical devices.

Taking more steps a day

Additionally, supportive government initiatives such as using big data in smart healthcare - storing the residents’ lifelong health records in an encrypted format shared by private and public hospitals⁵ – could improve the healthcare service quality and have given the medtech industry a boost.

Smart technologies have also started to integrate in the way people live. The Singapore government has a physical activity programme, the “National Steps Challenge” to promote healthy living. With step-trackers, residents are encouraged to walk more than 10,000 steps a day. Since its launch in November 2015, 70% of previously inactive participants have now averaged more than 7,000 steps per day, with 30% of participants clocking about 10,000 steps a day on average⁶.

Conclusion

The demand for telehealth, innovative AI technologies and medical devices is accelerating after the global public health crisis⁴. This rising demand is also driven by structural trends such as an increasingly ageing population in many major economies. Governments are also increasingly adopting innovative technologies to improve healthcare efficiencies and quality. Innovating medtech companies are thus presenting investors with exposure to long-term growth opportunities¹ in the industry.

This content represents our investment team’s current view and overall strategy provided for information only based on current market conditions not taking into consideration any specific investor’s investment objective and risk appetite. Not to be construed as investment recommendation or advice.

Diversification does not guarantee investment return and does not eliminate the risk of loss.

1. For illustrative purposes only based on current market conditions, subject to change from time to time. Not all investments are suitable for all investors. Exact allocation of portfolio depends on each individual’s circumstance and market conditions.
2. Source: “HKSH Launches Telemedicine Service for Family Medicine and COVID-19 Screening Tests”, HKSH Medical Group, 06.04.2020.
3. Source: “Pulse of the industry: medical technology report 2020”, Ernst and Young, Fall 2020. Provided for information only to illustrate macro trends not to be construed as offer, research or investment advice.
4. Source: “Telehealth: A quarter-trillion-dollar post COVID-19 reality?”, McKinsey & Company, 09.07.2021.
5. Source: “Hong Kong Smart City Blueprint 2.0”, Innovation and Technology Bureau, Hong Kong, December 2020.
6. Source: “National Steps Challenge & the Healthy 365 app”, Smart Nation Singapore, updated as of 30.08.2021.
7. Source: J.P. Morgan Asset Management, as of end-July 2021. The opinions and views expressed here are those held by the author as at the date of this document, which are subject to change and are not to be taken as or construed as investment advice. Provided for information only to illustrate macro trends not to be construed as offer, research or investment advice. Forecasts or estimates are indicative, may or may not come to pass. The manager seeks to integrate environmental, social and governance (“ESG”) factors in the investment process. ESG integration is the systematic integration of material ESG factors in company/issuer selection through research and risk management. It involves proprietary research on financial materiality of the ESG factors in relation to the relevant company/issuer and discretion to invest regardless of whether the company/issuer may be positively or negatively impacted by the ESG factors.Integration of ESG factors in the Fund’s investment process does not imply the Fund incorporates ESG factors as its key investment focus. The Fund is not authorised as an ESG fund by the Securities and Futures Commission, nor is it being marketed as an ESG fund.
8. Source: J.P. Morgan Asset Management, as of end-July 2021.

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